RAYMOND, Maine — South African miners at the Sibanye Stillwater Mine ended their three-month strike on June 6, 2022, due to promises of increased monthly wages and annual bonuses. Three days after the strike ended, the economic situation for South Africans improved even more as the rand officially strengthened globally, securing an economic boost for the nation.
South African Miners’ Strike
Sibanye Stillwater is a precious metal/gold mining company operating in South Africa, where miners’ unions are common. Moreover, this is not the first time the company’s workers have staged a strike against Sibanye with the assistance of their unions. The South African miners’ strike in 2019 was over the same topic: wages. However, the 2019 strike lasted five months, while the most recent strike lasted only three.
The strike affected about 31,000 miners working in the mines of Free State and west of Johannesburg. The South African miners’ strike ended with a deal set for a newly drafted three-year contract. Instead of only the mining employees receiving this deal, employers are also offering the new contract to all company employees seeking a wage increase, regardless of their union status.
The new agreement includes a 6.3% annual wage increase, with an additional 1,000 rand bonus in the first year, 900 in the second and 750 in the third. The final contract reflecting the new wages and bonuses underwent signing sometime in the week of June 13, 2022, according to Miningmx.
The Rand’s Troubled Past
It has been an arduous recovery for South Africa’s economy throughout 2022, as it lost all its significant economic progress due to the COVID-19 pandemic. Numerous factors challenged the rand’s ability to increase in value. The factors are primarily South African economic policies. Economists criticize South Africa’s economic policies for not targeting the high levels of unemployment, 34.5% and poverty, 55.5%.
Slowly, the government is removing or altering the policies for economic improvement. The strengthening of the rand reflects the newly improving economy as the government removes these policies.
The rand is seeing an increase in its strength and presence in the international markets for several key reasons, the weakened United States dollar and the increasing price of gold. As South Africa is a nation heavily reliant on exporting precious metals and minerals, chiefly gold, the country flourishes when gold prices are higher. When the price of gold is higher, South Africa can charge higher prices on its exports. When the price of gold is too low and South Africa must lower its prices, thus decreasing its profits, the nation’s economy suffers greatly and poses a challenge to the strength of the rand. Thankfully for South Africa, the cost of gold has recently increased, which has helped the rand on the international market, strengthening the currency thoroughly.
The rand’s value has been increasing and every day as the stock market closes for the night, the rand ends business days in late May 2022 with a value of between 0.3% and 0.5% stronger than the previous business days. As the rand strengthens, the South African economy will experience a positive domino effect. The end of South Africa’s miners’ strike could not have come at a better moment.
What Does This Mean for South Africa?
The success of the South African miners’ strike tells underpaid workers in other business sectors that they can earn higher wages too. In January 2019, the national minimum wage for South African workers was 20 rand per hour, which comes to about 3,500 rand based on a 40-hour working week.
A living wage in South Africa is estimated to be at least 6,700 rand for one individual per month. The estimated living wage means the national minimum wage was not high enough to support one individual. The new salaries for Sibanye’s employees will boost them above the South African minimum wage. The South African miners’ strike effectively shows other workers dependent on minimum wage that it is possible to achieve a livable wage and escape poverty. With the end of the strike and financial improvement, the miners could encourage other workers to follow suit with their own strikes.
If a currency strengthens, then inflation rates go down. Lower inflation rates lead to decreased costs of imported and essential goods. Should there be reduced prices of goods and services, more money can flow into a community, all leading to lowered poverty rates and a well-functioning economy.
The predictions show the first quarter of South Africa’s fiscal year 2022-2023, Gross Domestic Product (GDP) growing almost 2%. The year-end predictions are still in flux, but economists agree that the outcome will be positive and reflect well on South Africa’s future poverty and unemployment rates.
– Clara Mulvihill